China Cosco Holdings said it will likely post a loss for the first half of this year because rising fuel costs have eroded the container and bulk carrier’s earnings.
Cosco, which reports its second half results Aug. 26, cited “prolonged high fuel price under the declining international freight market,” in statement to the Hong Kong stock exchange Tuesday. The Tianjin-based shipping firm earned a profit of $540 million in the same period last year.
Fuel prices advanced 28 percent this year through yesterday, according to data compiled by Bloomberg. NYK Line and MOL, Japan’s two largest shipping lines, slashed their annual profit forecasts last month amid falling rates and rising fuel costs.
The global fleet of dry-bulk carriers will also grow 13 percent this year, outpacing a 4 percent increase in traffic, according to Clarkson Research. The Baltic Dry Index, a benchmark for commodity-shipping rates, has lost 25 percent in the year-to-date.